Toronto's real estate market during the month of March was impacted by the oldest story in the book: that of limited supply and skyrocketing demand.

The Toronto Real Estate Board, which released the data, said the greatest indicator of the lack of inventory was a 5.5 per cent increase in new listings throughout the Greater Toronto Area during the month of March, which slowed from steeper climbs earlier this year.

That, the board said, is a sign that the area’s limited supply is increasingly being scooped up by desperate buyers.

“This suggests that strong competition between buyers, which has fuelled strong price growth so far this year, will continue to be experienced throughout the spring.”

Sales, too, were up in the GTA, rising 11 per cent year-over-year to 8,940 transactions in March. Etherington said that was likely a result of the Bank of Canada’s decision to lower the benchmark rate in January.

“Home sales increased compared to last year as the cost of home ownership remained affordable, with lower interest rates going a long way to mitigate the effect of rising home prices,” Etherington said.

However, as buyers become increasingly desperate to get into the detached market, particularly in the City of Toronto, they are inadvertently driving up the price.

The average price of a single-family in Toronto rose almost 16 per cent from the year-ago period to more than $1.04 million.

“It is clear that seller's market conditions in many parts of the GTA are driving price growth,” said Jason Mercer, TREB’s director of market analysis.

“However, looking at the detached market segment in the City of Toronto in particular, growth in the average selling price outstripped growth in the MLS HPI. This points to the fact that the mix of detached homes sold this year compared to last has shifted towards more expensive properties.”

Total sales in the city proper were up 7.6 per cent year-over-year at 3,196 transactions, mainly from the condo market, which posted a 13.5 per cent increase in sales over the year-ago period.

Average price across all property types was up 9.6 per cent in Toronto at $655,067.